To say that 2014 was a watershed year in Indian politics would not be an overstatement. It was for the first time since 1984 that the country had given itself a government with a clear majority -- one that did not have to rely on a mosaic of regional allies to implement much needed reforms. Also, after exactly a decade, an aggressive politician, and a controversial one at that, Narendra Modi, had replaced a mild-mannered academic-turned-bureaucrat, Manmohan Singh, as the country’s prime minister.

Not only was the Indian National Congress (INC)-led United Progressive Alliance voted out of power in May, the party credited with winning India its independence from British rule in 1947, was reduced to its lowest poll tally ever. And, after it won the national election, Modi’s Bharatiya Janata Party (BJP) also notched up a series of impressive victories in state polls. As this report revealed, for the first time ever across almost 30 Indian state legislatures, BJP members outnumbered those of the INC. The electorate of the largest democracy in the world had turned their backs on one of its oldest political parties in the country that ruled it for over five decades of the six-and-half decade old post-independence history.

More than that, it was the first time ever that the right-wing Hindu nationalist BJP had won over half the seats in the Lok Sabha, India’s lower house of parliament. This, in a country, which had since 1989 endured shaky, tenuous coalitions.

Will the bull run continue in Indian markets

A stable government led by a pro-business Modi saw stock markets surge and India was one of the best-performing emerging markets of 2014 with the Sensex, the benchmark index of the Bombay Stock Exchange, rallying almost 30 percent, the most in five years. However, according to Varun Khandelwal, director at Bullero Capital, the bull run on the bourses will continue only if Modi can deliver a good federal budget in February. “I think the markets will hold on until the budget, but not much longer,” he says.

Amar Ambani, head of research at IIFL Holdings, says that the business community is looking at the budget - which Finance Minister Arun Jaitley is due to present in February -- with the hope that the government would control its burgeoning subsidy bill. Subsidies are an enormous drain on the country’s economy, which has been struggling to keep its fiscal deficit in check. According to government figures released in October this year, the country’s fiscal deficit had reached nearly 83 percent of its target in the first half of the financial year.

E-Commerce up, manufacturing down

In 2014, Indians took to the Internet and shopped online more than ever before, and made some of the country’s homegrown e-commerce companies, including Flipkart and Snapdeal, achieve dizzying valuation levels. Indians, now the second-largest nationality on the Internet, also propelled their country to become one of the fastest-growing smartphone markets in the world. This demand was also a factor behind the country’s growing trade deficit, because, though Indians love their new tech toys, they don’t make very many of them.

And therein lies the other story of 2014. In October, India saw its steepest decline in industrial production in recent times, following the general global trend. Modi has promised to transform the country into a major international manufacturing hub through his ‘Make in India’ initiative, but little seems to have happened since he took office in May. If anything, the prime minister’s ambitious plan was criticized by India’s central bank chief, an MIT-trained economist Raghuram Rajan, who said that an import substitution strategy would not work for India, a view that finance minister Jaitley later rejected.

And while Modi literally wielded the broom to promote his "My Clean India" campaign, Indian industrialists cringed at what they now said was his government’s ‘lack of boldness in reforms and an absence of radical ideas,’ according to The Economic Times, a business daily. And, they might have a point as the strongest government in three decades appears to have done little since taking office seven months ago to turn the economy around. In fact, the government’s own mid-year economic review pegs India’s growth forecast at about 5.5 percent, even as the US, which is one of India's major trading partners, is looking at its strongest growth numbers in at least a decade, according to the New York Times.

Reforms, the low-hanging fruit

To give the government its due, it has deregulated the price of diesel and also kickstarted the process for auctioning off coal mines to downstream companies, but it could be argued that these were reforms that were either on auto-pilot or for which conditions were favorable. On the other hand, Modi has found it hard to push through reforms like introducing a simpler tax regime by imposing a single Goods and Services Tax or closing long-pending defense deals, including a multibillion-dollar contract to acquire fighter jets for the Indian Air Force.

Even a seemingly worn out opposition was able to strategically unite and stall parliament, making legislative business impossible, forcing Modi to enforce key reform measures like allowing greater foreign investment into the insurance sector and overhauling regulations to acquire land for businesses via the rarely used executive decree route. Potentially, both these measures can bring in investment of the order of several hundred billion dollars.

Looking ahead

2015 is pregnant with expectations. Come January, and Modi faces a significant foreign policy engagement when Obama comes calling on New Delhi. But, given Obama's lame-duck status, his waning popularity at home, and the Democrats having lost control of Congress in the recent mid-term polls, it's not clear if any significant deals would be struck during the visit.

At home, Modi is promising more. On Monday, he reportedly told senior government officials he wants to see India build “a new Chicago every year,” as part of his mission to build 100 “smart cities” by the end of his term in 2019. His stupendous electoral victory, followed by visits to the US and Australia, have proved beyond doubt that Modi is a charmer, and knows how to use optics to his advantage. India bought into his dream in 2014. In 2015, he must begin to deliver.